Permissible plan design?

[SLuskin]

A county is saying that if an employee has an employed spouse and the county employee is eligible for the spouse's employer's coverage, they are not eligible to be covered under the county plan.

Can you do that?

Next, the county is saying that they will reimburse the employee for the cost of covering the county employee under that employee's spouse's plan.

Then, they will reimburse the out of pocket expenses that the employee incurs if that expense would have been covered under the county plan.

Do you think that after 2014 they will still be able to offer that? There is no maximum stated in their benefits description, but it seems unlikey that this unlinked HRA would satisfy the no annual no lifetime max requirements that will be in effect.

Thanks.

[leevena]

Time will tell since not all of the guidance/regulations have been released. But based on what the regulatory agencies have announced so far, this could very well continue. The HRA can have a limit if it is integrated with another plan and that plan's coverage alone complies with PPACA annual and lifetime requirements.

[SLuskin]

Time will tell since not all of the guidance/regulations have been released. But based on what the regulatory agencies have announced so far, this could very well continue. The HRA can have a limit if it is integrated with another plan and that plan's coverage alone complies with PPACA annual and lifetime requirements.

But can you consider the HRA linked if you are not permitted to be in the base health plan?

[leevena]

Time will tell since not all of the guidance/regulations have been released. But based on what the regulatory agencies have announced so far, this could very well continue. The HRA can have a limit if it is integrated with another plan and that plan's coverage alone complies with PPACA annual and lifetime requirements.

But can you consider the HRA linked if you are not permitted to be in the base health plan?

I just re-read and saw the "unlinked" in your posting, sorry.

I don't know the answer to that. There are other options other than an HRA that can be used to fund this, so they may choose another route, or just simply drop it all together. Don't really know yet. Sorry.

[Guest Klask]

Morning,

I do have a question as it relates to cafeteria plans and deferred compensation. If a cafeteria plan has an opt out option that allows employees to waive insurance benefits and in return the employer provides a dollar amount, (which I thought has to be taxable income) could the employer set up a deferred compensation account that the money is deposited into?

I have not heard of this, but it does not mean it cannot happen. I thought the opt out dollar amount give to the employee had to be taxable.

Also if the employee has to show proof of other coverage before opting out does it have to be spousal coverage, or could the employee obtain any insurance elsewhere.

Not sure if there is any special regs for the State of Michigan.

Thank you.